TNAG-0334-FCO40-370-Visits-of-Secretary-of-State-for-Foreign-and-Commonwealth-Af-1972 — Page 27

CONFIDENTIAL

reservoirs to help meet the growing needs for water: and possibly

a mass transit system (details at Annex A).

4.

Moreover Hong Kong's economy is very largely dependent on

its trade with the outside world. It is accordingly particularly

vulnerable to outside influences, whether from political scares

or from a closing up of markets; and the indications are that Hong

Kong will find it difficult in future to maintain the rate of

growth it has achieved in recent years.

5. In view of the buoyant state of the Hong Kong economy (and

the unhealthy state earlier of the UK balance of payments) it has

been difficult for HMG to help Hong Kong financially with its

development problems. The calls for financial assistance from HMG

are such that they can only be met on a system of priorities based

on need. However, the Unofficial Members of the Executive Council

have been informed (during the negotiations over the defence

contribution) that it must not be thought that HMG would not be

prepared to consider assisting Hong Kong in some appropriate way

if an urgent need for such assistance were to arise at some future

time and a specific case put forward.

6.

Meanwhile the Overseas Development Administration (ODA) are

very ready to place at Hong Kong's disposal the advice and

recommendations of their technical advisers who visit the Colony

from time to time. The ODA also finance a small scheme for the

training of students in Britain (about £32,000 a year); and they

are actively engaged in recruiting technical personnel for employ-

ment by the Hong Kong Government.

17.

2

CONFIDENTIAL